Page:Federal Reporter, 1st Series, Volume 2.djvu/886

THOMAS V. B., F. K. & P. RT. CO. 879 �A ratification, to have this effect, must be made by a board composed of disinterested direetors. It is not enough that Buch a contract bas been ratified by a board composed lu part of the interested direetors. The least that can be required in sueh a case is that the direetors conçerned in the contract shall resign, and allow their places to be filled by persons who can, without bias, represent the interests of the corporation, and particularly of the individual stockholders. �In the case of R. Co. v. Dewey, le Mioh. 477, the supreme court of that state had occasion to comment upon a contract made with a corporation by a company in which two of the direetors were interested, and in the course of the opinion grave doubts were expressed by the court as to whether a ratification by the board, even with full knowledge of ail the facts, could render the contract valid while the two interested direetors remained influential members of the board, espe- cially if they took part in such ratification. �The court was evidently strongly inclined to the opinion that such a ratification, even if made upon a full disclosure, •would amount to nothing. The vice of the original contract •would, in such a case, enter into the aot of ratification — the latter, likethe former, being a transaction in part by direetors with themselves. Besides, where shall we draw the lines? If the presence of two interested direetors in the board at the time of ratification does not vitiate the act, would the pres- ence of a larger number of such direetors bave that effect, and if so, what number? �3. It remains to be determined whether the plaintiff can have relief to the estent that the railroad company has been benefited by the contract. This depends upon the question whether the contract was tainted with vice or immorality. Creath v. Sims, 5 How. 204. If it were possible to do so, consistently with well-settled principles of great public im- portance, I should be inclined to grant this relief, since, as between the parties, it is equitable that the corporation should account for whatever of value it has received from the con- struction company. But if there is in the contract the ele- ment of moral turpitude which the law denounces so stroHgly, ����